Image source: M&S Group plc
The Marks and Spencer (LSE:MKS) share price has been taking a bit of a tumble over the last week or so, falling at one point by as much as 10%. It’s now down less than 2% over the past trading week but the earlier rapid sell-off came as the company reported its IT systems had been compromised.
A successful cyberattack forced the business to halt all online transactions on its website, as well as shoppers being unable to use contactless payments until in-store. Even today (5 May), the company’s wider ops are still compromised, with reports that it’s losing millions of pounds a day in sales.
This ransomware attack certainly doesn’t give the group’s first quarter of its 2026 fiscal year (ending in March) a good start. After all, online sales make up a notable chunk of sales, particularly for its Clothing & Home segment.
Investors will have to wait for the next trading update to see the full scale of the disruption this incident has caused. And it’s yet another reminder of the rising importance of having robust cybersecurity systems in place. But is the sell-off a reason for long-term investors to panic?
Keep calm and carry on
Ultimately, this incident is a short-term hiccup. The company has hired external professionals to both undo the damage and prevent such a situation from happening again. As such, management is taking the necessary steps to resolve the problem and learn from it promptly.
Depending on how long it takes to get things back up and operational, a profit warning might be avoidable. But even if one does emerge, it’s worth pointing out the Marks and Spencer share price is still on a bit of a roll. In fact, over the last 12 months, the stock is up almost 45%.
While the short term might be volatile, the long-term investment thesis remains intact. As such, selling in a panic may not be a prudent move. But does that mean the recent turbulence is a buying opportunity?
Are M&S shares on sale?
CEO Stuart Machin has been leading the business through a bit of a restructuring. He’s been optimising the group’s store portfolio, closing or relocating underperforming locations, as well as pushing for a more dominant digital presence. And excluding the recent cyber incident, these moves are slowly adding value for shareholders.
Subsequently, despite the bumps along the way, analyst projections for sales and earnings remain largely intact. And in terms of 12-month share price targets, the average consensus continues to be 447.5p – unchanged from a month ago.
While this continued bullish sentiment is encouraging, it’s not risk-free. We’ve already seen execution risk throw a spanner in the works. And with Asda looking to recapture its lost market share under a new Executive Chairman through undercutting, a new supermarket pricing war might be about to kick off.
Being a more premium retailer, the threat of Asda might not be as severe compared to a rival like Tesco. But suppose inflation continues to drive up the cost of living? In that case, competitive prices from other supermarkets might become more problematic.
All things considered, M&S seems to still be on the rails. And providing the cyber situation is resolved promptly, shareholders may want to consider topping up on their position while it’s trading lower.
